April 8, 2004
Senate Heads Toward
Vote On Pension Bill
The Senate is expected to vote on the pension bill conference report
this afternoon, leaving Republican backers of the bill optimistic that
they
will enact legislation before the April 15 deadline companies face for
making their first pension payments of the year,
CongressDaily reported. Senate Health, Education, Labor and
Pensions ranking member Edward Kennedy (D-Mass.) said Democrats opposing
the bill would 'make their case on the floor,' but said he had not
counted how many Democrats would join him. Kennedy supports the core of
the bill, which provides an estimated $80 billion in relief over two
years to traditional 'single-employer' pension plans. But he opposed the
bill as it emerged from conference, after House Republicans insisted on
paring aid to sponsors of multi-employer pension plans. Despite
Kennedy's resistance, Democrats announced on Wednesday that they would
not
block a floor vote on the bill, the newswire reported. Kennedy is
offering stand-alone legislation restoring the Senate multi-employer
provisions, as well as a similar amendment to legislation that would
repeal the foreign sales corporation/extraterritorial income tax break,
CongressDaily reported.
GOP Leaders Offer New
Asbestos Bill, But Hatch Doubts Success
Senate Judiciary Chairman Orrin Hatch (R-Utah) said he did not expect
the asbestos litigation bill he introduced yesterday with Senate
Majority Leader Bill Frist (R-Tenn.) to win an anticipated cloture vote
when Congress returns from its Easter recess the week of April 19,
CongressDaily reported. The legislation is encountering
resistance from Democrats, who say it does not provide enough money to
compensate victims of asbestos-related illnesses. But Hatch said
Republicans would continue to pressure opponents of the bill by forcing
additional votes.
As proposed by Hatch and Frist,
the bill establishes a trust fund as large as $124 billion to replace
the current tort system, which supporters say is so overwhelmed by
asbestos claims it does not provide adequate or timely compensation to
the sickest victims. Hatch said the bill reflects changes -- including
increased award values for victims and a provision allowing asbestos
cases to return to federal courts if the fund runs dry -- made as a
result of negotiations since the asbestos bill emerged from the
Judiciary Committee last year on a near-party-line vote. But it has not
won the backing of labor unions and key Democrats, the newswire
reported.
Edwards Introduces Bills To Repeal OCC Pre-emption
Rule
Noting that his state has one of the strongest anti-predatory lending
laws in the nation, Sen. John Edwards (D-N.C.) introduced legislation
yesterday to repeal the Office of the Comptroller of the Currency's new
rule exempting national banks from many state consumer-protection laws,
CongressDaily reported. 'We need a
strong national law to fight predatory lending,' Edwards said. 'We don't
need weak national rules and a prohibition of the strong state laws now
on the books.' Testifying on Wednesday before the Senate Banking
Committee, North Carolina Attorney General Roy Cooper urged lawmakers to
consider that type of legislation and said he and other state attorneys
general plan to challenge the OCC pre-emption rule in
court.
The OCC pre-emption rule, which took
effect in February, exempts the nation's 2,100 national banks from most
state laws from which nationally chartered thrift institutions already
are exempt under Office of Thrift Supervision regulations. Those
pre-empted state laws pertain to lending and deposit taking. The rule
also would establish new federal anti-predatory lending standards for
national banks and restrict state agencies' authority to take actions
against those banks. Edwards introduced two resolutions on Wednesday,
one of which would nullify the pre-emption rule. The second resolution
would repeal another new regulation that states that the OCC has
'exclusive'
authority to supervise, examine and regulate national banks, the
newswire reported.
Consumer Borrowing
Rises
Consumer borrowing rose $4.2 billion in February, less
than expected and the smallest increase in three months, the Federal
Reserve reported yesterday, Bloomberg News reported.
The Fed said that February's borrowing through credit
cards and other types of loans increased at a 2.5 percent annual pace.
Consumers have received $11.2 billion more in tax refunds this year than
at the corresponding time in 2003, and sales at Wal-Mart Stores and other retailers were up last month as
households spent much of the extra money. 'It's hard to imagine not
seeing a pretty nice rise in March spending, which will probably
continue into the second quarter,' Tim Rogers, chief economist at
Briefing.com in
before the report was issued. 'There is no real downside risk to the
consumer.'
forecast that borrowing would rise in February by $2 billion, the
smallest projection in a Bloomberg News survey of economists. The
economists had expected consumer credit to rise at a $7.5 billion
pace.
Credit card and other revolving debt rose at a $1.6
billion annual pace. Nonrevolving loans, which include car and truck
loans, increased at a $2.6 billion pace compared with $7.9 billion the
month before, the newswire reported.
Judge Rejects Plea Bargain in
Enron Case
A federal judge on Wednesday
rejected a plea bargain struck with the wife of Enron's former finance
chief, prompting her to withdraw her guilty plea and cease cooperating
with the investigation of the energy trader's collapse into bankruptcy,
Reuters reported. Lea Fastow, a former Enron assistant treasurer,
changed her plea to not guilty after U.S. District Judge David Hittner
rejected the deal worked out between prosecutors and Fastow's lawyers.
For months, Hittner suggested he would not stick to the agreed prison
term of five months. Hittner, speaking from the bench, said he
saw no reason why Fastow should serve less than the 10 to 16 months
recommended by probation officials.
On Jan. 14, Fastow pleaded guilty to one
count of filing a false tax return. On the same day, under a separate
plea bargain, her husband, Andrew Fastow, pleaded guilty to wire and
securities fraud and agreed to cooperate in the Enron probe. Assistant
Attorney General Christopher Wray said Andrew Fastow's guilty plea and
cooperation agreement were not affected by the new developments, the
newswire reported.
Brazilian Group Submits Enhanced Bid to Buy
WorldCom's Brazilian Unit
Calais Participacoes S.A. today enhanced its US$550
million offer to purchase WorldCom Inc.'s interest in its Brazilian
subsidiary, Embratel Participacoes S.A, according to a press release.
Under its enhanced offer, Calais would guarantee that WorldCom receives
a minimum of US$360 million for the sale of its interest in Embratel --
the same amount being offered by Telefonos de Mexico, S.A. de C.V. to
buy Embratel -- in the event that, contrary to Calais' belief, its
acquisition of Embratel does not receive necessary Brazilian regulatory
approval. On
2004
offered to purchase 100 percent of the voting common stock of Embratel
held indirectly by WorldCom for US$550 million. The purchase price
offered by
million (or 52.8 percent) more than that offered by Telmex pursuant to
its publicly disclosed
12, 2004
Consolidated Freightways Reschedules
Distribution Facility to April 15
As part of the largest real estate sale in
transportation history — 228 total properties with an appraised
value over $400 million — Consolidated Freightways (CF) announced
in a press release that it is putting its Wilson distribution facility
up for sale to the highest bidder, through an open auction process
scheduled for April 15, 2004. The
cross-dock distribution facility situated on 4.96 acres and has been
closed to operations since
3, 2002 when the 75-year-old company filed for bankruptcy
protection. Since then CF has been liquidating the assets of the
corporation under orders of the bankruptcy court. Fifteen CF employees
formerly worked at the
price of $75,000 has been tentatively established. To date, 192 CF
properties throughout the
States
have been sold for over $331.5 million.
Fruit Company to Liquidate
Northern Michigan Fruit Company Inc. of
part of bankruptcy proceedings beginning next week, reported the
face='Times New Roman'>Leelanau Enterprise.
The company filed for voluntary reorganization under
chapter 11 in 2002 – the year
all but wiped out because of bad weather.
“We worked diligently to reorganize after that
and held out as long as we could,” said Michael Corcoran, an
attorney for the company, the newspaper reported. “But there
haven’t been enough good years since 2002 for the company to
recover.” Earlier this year, the company filed for liquidation
under chapter 7 of U.S. Bankruptcy Code. A meeting of the
company’s creditors is scheduled for April 14 in
a
Air
Restructuring Boss Resigns
size='3'>Air
No. 2 executive, Calin Rovinescu, resigned unexpectedly on Wednesday for
undisclosed reasons, marking another setback in the insolvent airline's
efforts to emerge from bankruptcy protection and avoid liquidation,
Reuters reported. Rovinescu, a lawyer, headed up Air Canada's
restructuring under bankruptcy protection over the last year, a role
that is now taken up by CEO Robert Milton and Paul Brotto,
vice-president for planning and cost management. Air
said it will also ask the court to extend the role of the bankruptcy
monitor.
Analysts said that the departure of
Rovinescu suggests that a $650 million ($500 million) rescue offer
by
table. Rovinescu, like
stay on board by a C$20 million bonus scheme offered by Li for a
successful restructuring of the airline. Rovinescu said in a
release he believed that Air Canada could still complete a successful
restructuring, the newswire reported.
Federal-Mogul Faces
Opposition To Its Chapter 11 Disclosure
Creditors, insurers and government agencies involved
in Federal-Mogul Global Inc.'s chapter 11 case have all objected to the
disclosure statement to the company's reorganization plan. Objections
filed with the U.S. Bankruptcy Court in Wilmington, Del., mainly last
week, generally said the disclosure statement didn't provide creditors
with enough information to vote on the plan or said the document
improperly classified certain claims against the auto-parts company.
Companies under bankruptcy protection must file a disclosure statement
with their reorganization or liquidation plan, outlining how creditors
will be paid, so that parties can decide whether or not to support the
plan.
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United Airlines Says March Traffic Rose 9.9
Percent
UAL Corp.'s United Airlines said March traffic rose
9.9 percent to 5.94 billion revenue passenger miles from 8.72 billion a
year earlier. A revenue passenger mile is one paying passenger flown one
mile. Load factor, or percentage of seats filled, was 80.1 percent for
the month, compared with 73.7 percent a year earlier, the carrier said
in a press release Tuesday.
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All Rights Reserved